Josep Borrell asks the European Central Bank and Member State governments “to do the opposite to what they are doing” to save the euro

Barcelona (ACN).- The former President of the European Parliament, the Socialist Josep Borrell, believes that the policies implemented to fight the sovereign debt crisis have not been correct. Borrell, who holds a PhD in Economics, has asked the European Central Bank (ECB) and European governments “to do the opposite to what they are doing”. This means the ECB should buy public debt from eurozone countries and help Greece to a greater extent. In addition, the eurozone governments should undergo adjustments, but at a slower rate, in an attempt to avoid stalling an economic recovery “because growth is necessary to reduce the debt”. Furthermore, the former President of the European Parliament is convinced that “everybody is partly responsible” for the current crisis. Borrell, who was Spanish Minister for Public Works and Deputy Minister for Budget and Finances in several Felipe González governments, believes “the worst is possible” and action is needed “quickly”. He added that “the euro will not disappear” but did tell CNA that “the worst” that could happen would be that one or several members of the eurozone countries leaves and abandons the Euro. “It would be a very big mess […] for everybody”, he stated. It would affect all eurozone countries and every other world economy. Josep Borrell, who is a member of the Catalan Socialist Party –which is part of the Spanish Socialist Party-, presented his book ‘La crisi de l’euro. D’Atenes a Madrid’ (‘The Euro crisis. From Athens to Madrid’) in Barcelona on Tuesday. The book has been written together with the Catalan Brussels-based journalist, Andreu Missé.

The Socialist leader, who is currently the President of the European University Institute (located in Florence), is critical with the way the European Central Bank and the eurozone countries are handling the sovereign debt crisis. It has caused a deep euro crisis affecting not only the entire continent, but the world’s finances. Josep Borrell, who holds a PhD in Economics and a Masters in Mathematics at the University of Stanford, defends the idea that a monetary union needs a Central Bank able to act and buy sovereign debt. “The worst thing that could happen is having a country being forced to abandon the euro because it cannot finance its needs in the capital markets. This can happen if the [European] Central Bank does not react quickly”.

Everybody will be hit: those abandoning the euro, those remaining and those that never had the euro as their currency

The former President of the European Parliament sent a clear warning. He said that “if we do not react, things that should not happen will happen. This is why we need to implement a different policy. If we continue doing things as we have been doing, we will have a problem”. According to Borrell, “the problem” would be “a great mess” that “would affect everybody”; it would affect all eurozone countries, and every other world economy.Those abandoning the euro would continue to have their debt in the currency, so “leaving the euro would be useless”. In addition, those remaining would also be hit by the financial unrest.

Immediate action is needed, Euro bonds are a necessity

Borrell defends that “energetic and immediate measures are needed”. The solution for the former President of the European Parliament is to create Euro bonds and have a single European treasury. However, those are not immediate measures and need time to be well designed and approved. In addition, Borrell criticised the drastic budget cuts that many European governments are undertaking, pressured by the ratings agencies. Borrell does not criticise the principle of austerity, but he has condemned budget adjustments. He believes they have been carried out too quickly and have stalled economic growth. He has asked the governments “to take economic growth seriously”, as “it is necessary to reduce the debt”.